SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ISEMPLOYMENT.COM, INC.
(Name of small business issuer in its charter)
Wyoming
(State or jurisdiction of incorporation or organization)
8742
(Primary Standard Industrial Classification Code Number)
86-0970152
(I.R.S. Employer Identification No.)
213-380 Pelissier Street, Windsor, Ontario N9A 6W8 Canada
(Address of principal executive offices)
213-380 Pelissier Street, Windsor, Ontario N9A 6W8 Canada
(Address of principal place of business or intended principal place of
business)
Scott Murray
213-380 Pelissier Street,
Windsor, Ontario N9A 6W8 Canada (519) 258-8318
(Name, address and telephone number of agent for service)
--------------------------
copy to:
David J. Levenson, Esquire
Scott M. J. Anderegg, Esquire
Mays & Valentine, L.L.P.
1660 International Drive
Suite 600
McLean, Virginia 22102
(703) 734-4328
Approximate date of proposed sale to the public: From time to time after the
effective date of this Registration Statement.
<PAGE>
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the
"Securities Act"), please check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box. / /
CALCULATION OF REGISTRATION FEE
================================================================================
Title of Each Class Amount Amount of
Securities to be Offering Price Per Registration
to be Registered Registered Unit Fee
----------------------------- ---------- ------------------ ------------
Common Stock, $.001 par value 600,000 $ .001(1) $ .16
TOTAL 1.00
(1) Estimated solely for the purpose of calculating the Registration Fee. The
price of the shares has been determined by ISEmployment.com on the basis of the
par value of the shares issued and outstanding.
================================================================================
------------------------
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act or until the registration statement shall become effective on
such date as the Commission, acting pursuant to said Section 8(a), may
determine.
================================================================================
<PAGE>
<TABLE>
<CAPTION>
ISEMPLOYMENT.COM, INC.
CROSS REFERENCE SHEET
Form SB-2 Item Caption in Prospectus
---------------- -----------------------
PART I
<S> <C>
Item 1. Front of Registration Statement and
Outside Front Cover of Prospectus . . . . . . Front of Registration
Statement and
Outside Front Cover of
Prospectus
Item 2. Inside Front and Outside Back Cover
Pages of Prospectus . . . . . . . . . . . . . Inside Front and Outside
Back Cover Pages of
Prospectus
Item 3. Summary Information and Risk Factors. . . . . Prospectus Summary; Risk
Factors
Item 4. Use of Proceeds . . . . . . . . . . . . . . . Use of Proceeds
Item 5. Determination of Offering Price . . . . . . . Not Applicable
Item 6. Dilution. . . . . . . . . . . . . . . . . . . Not Applicable
Item 7. Selling Shareholders. . . . . . . . . . . . . Selling Shareholders
Item 8. Plan of Distribution. . . . . . . . . . . . . Plan of Distribution
Item 9. Legal Proceedings . . . . . . . . . . . . . . Litigation
Item 10. Directors, Executive Officers, Promoters and
Control Persons . . . . . . . . . . . . . . . Management
Item 11. Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . . Management-Principal
Stockholders
Item 12. Description of Securities. . . . . . . . . . . Description of Securities
Item 13. Interest of Named Experts and Counsel. . . . . Not Applicable
Item 14. Disclosure of Commission Position on
Indemnification . . . . . . . . . . . . . . . Indemnification of Officers
and Directors
Item 15. Organization Within Last Five Years. . . . . . Related Transactions
Item 16. Description of Business. . . . . . . . . . . . Business
Item 17. Management's Discussion and Analysis or
Plan of Operation . . . . . . . . . . . . . Management's Discussion
and Analysis
of Financial Conditions and Plan
of Operations
Item 18. Description of Property. . . . . . . . . . . . Business-Properties
Item 19. Certain Relationships and Related Transactions Related Transactions
Item 20. Market for Common Equity and Related
Stockholder Matters . . . . . . . . . . . . Market Information
Item 21. Executive Compensation . . . . . . . . . . . . Management - Executive
Compensation
Item 22. Financial Statements . . . . . . . . . . . . . Financial Statements
i
<PAGE>
Item 23. Changes In and Disagreements With Accountants
on Accounting and Financial Disclosure . . . Not Applicable
PART II
Item 24. Indemnification of Directors and Officers
Item 25. Other Expenses of Issuance and Distribution
Item 26. Recent Sales of Unregistered Securities
Item 27. Exhibits
Item 28. Undertakings
</TABLE>
ii
<PAGE>
PROSPECTUS
ISEmployment.com, Inc.
600,000 Shares Of Common Stock $.001 Par Value
This prospectus covers the resale by thirty selling shareholders, from time
to time, of up to 600,000 shares of common stock, $.001 par value per share, of
ISEmployment.com, Inc., a Wyoming corporation, in the over-the-counter market,
at prevailing market prices, at negotiated prices or otherwise.
ISEmployment.com will not be receiving any proceeds from the sale of shares
by the selling shareholders but will bear all of the expenses of the
registration of the shares.
ISEmployment.com's common stock is not currently listed or quoted on any
quotation medium.
------------------------
See "Risk Factors" beginning on page 3 for a discussion of certain factors
that should be considered by investors.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense.
------------------------
The date of this prospectus is November 10, 2000
<PAGE>
Prospectus Summary
ISEmployment.com, Inc.
ISEmployment.com is an Internet based development stage company, which will
provide human resources and recruiting services on-line. ISEmployment.com's
site will differentiate itself from other employment-related sites by creating a
virtual human resources center and a virtual recruitment and selection system.
ISEmployment.com's targeted market will be providing its services to United
States corporations which are recruiting Information Systems Professionals, with
an emphasis on qualified foreign candidates.
The offering
ISEmployment.com previously issued 600,000 shares of its common stock to
thirty individuals. This prospectus covers any resale of these shares.
Common Stock Registered for Resale . . . . . . . . . . . 600,000 shares
Common Stock Outstanding prior to the Offering . . . . 600,000 shares
Common Stock Outstanding after the Offering . . . . . . 600,000 shares
Selected Financial Data
The following selected consolidated financial data should be read in
conjunction with "Management's discussion and analysis of financial condition
and plan of operations" and the consolidated financial statements, including the
accompanying notes, included elsewhere in this prospectus. The statement of
operations data for the years ended September 30, 1999 and 1998 and the balance
sheet data at September 30, 1999 and 1998 are derived from ISEmployment.com's
audited financial statements, included elsewhere in this prospectus, and include
all adjustments that ISEmployment.com considers necessary for a fair
presentation of the financial position and results of operations at that date
and for such periods.
<TABLE>
<CAPTION>
Summary Operating Data
For the twelve months ended December 31, 1998, 1999 and the nine
-----------------------------------------------------------------
months ended June 30,2000 (proforma and unaudited)
--------------------------------------------------
December 31, December 31, June 30, 2000
-------------- -------------- ---------------
Statement of Income Data: 1998 1999
-------------- --------------
<S> <C> <C> <C>
Net sales . . . . . . . . . . . . . . . . . . $ - $ - $ -
System Development Costs. . . . . . . . . . . - - 223,429
Gross profit. . . . . . . . . . . . . . . . . - - (223,429)
General and administrative expenses . . . . . 25 25 27,498
Income (loss) from operations . . . . . . . . (25) (25) (250,927)
Provision for income taxes. . . . . . . . . . - - -
2
<PAGE>
Net income (loss) . . . . . . . . . . . . . . $ (25) $ (25) $ (250,927)
Net income per common share (loss). . . . . . $ ( 0.00) $ ( 0.00) $ (0.25)
Weighted average common shares outstanding(1)
</TABLE>
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
-------------- -------------- ---------------
Balance Sheet Data: Actual Adjusted(2) Actual
-------------- -------------- ---------------
<S> <C> <C> <C>
Working capital (deficit). . . . . . . . . . . $(252,002) $ (272,102) $ (-)
Total assets . . . . . . . . . . . . . . . . . 9,645 9,645 -
Total debt . . . . .. . . . . . . . . . . . . 261,647 281,747 -
Total stockholders' equity (deficit) . . . . . $(252,002) $ (272,102) $ (-)
</TABLE>
<TABLE>
<CAPTION>
As of December 31, 1998, 1999 and June 30, 2000
-----------------------------------------------
(including Proforma April 30, 2000)
December 31, December 31, June 30, 2000 April 30, 2000
------------- -------------- --------------- ----------------
1998 1999
Projected Balance Sheet
<S> <C> <C> <C> <C>
Cash . . . . . . . . . . . . . . . . . . . $ - $ - $ 1,203 $ 2,037
Accounts receivable. . . . . . . . . . . . - - - -
Property & equipment - - - -
Other assets - - 8,442 8,442
Total assets - - 9,645 10,479
Accounts payable, capital leases - 50 2,200 10,200
Loans/advances payable-short-term - - 259,447 153,180
Long term debt . . . . . . . . . . . . . . - - - -
Stockholders' equity . . . . . . . . . . . - (50) (252,002) (152,909)
Total liabilities and stockholders' equity $ - $ - $ 9,645 $ 10,479
<FN>
(1) Based on 1,000,000 shares issued and outstanding for the period ending December 31, 1998 and 1999
and June 30, 2000.
(2) As adjusted shows the net effect of the offering and the use of net proceeds.
</TABLE>
Risk Factors
An investment in our stock involves a high degree of risk. The achievement
of our business objectives is subject to a number of market and other factors
beyond our control, and our future prospects are speculative.
WE FACE SIGNIFICANT COMPETITION WITH COMPETITORS WHO HAVE SIGNIFICANTLY GREATER
FINANCIAL RESOURCES.
While we provide a "total solution" content program, many of these
competitors offer one or more Internet sites with information products similar
to individual items we provide over the Internet; and many of these competitors
may have significantly greater financial resources than we do. These financial
resources could be deployed to more aggressively compete on the Internet or
through more traditional media, to our disadvantage, at any time.
We expect competition to persist and intensify. Competitors using other
media to deliver information products could adapt their businesses to include
the Internet as a medium for delivering their products. Competitors could
develop or offer services that provide significant performance, price, creative
or other advantages over those offered by us, and any competitor or group of
competitors could have a material adverse effect on our business.
3
<PAGE>
WE WILL REQUIRE ADDITIONAL FUNDS TO ACHIEVE OUR CURRENT BUSINESS STRATEGY.
We will require more capital to achieve our current business strategy. If
such funds are unavailable we may have to substantially curtail operations or
cease operations altogether. As we require additional funds to sustain our
planned expansion and growth we will have to seek additional equity or other
financing. Such financing may not be available. Even if it is, it may be on
terms that are materially adverse to your interests with respect to dilution of
book value, dividend preferences, liquidation preferences, or other terms.
We cannot guarantee that we will be able to obtain additional financing as
we need it. When our operations require additional financing, if we are unable
to obtain it on reasonable terms, we could be forced to restructure, file for
bankruptcy, sell assets or cease operations, any of which could put your
investment dollars at significant risk.
OUR SHAREHOLDERS COULD FIND THAT THERE IS NOBODY WILLING TO PURCHASE THEIR
SHARES WHEN THEY WANT TO SELL, AND IT IS POSSIBLE THAT OUR SHAREHOLDERS COULD
LOSE THEIR ENTIRE INVESTMENT IN OUR STOCK.
Our stock should only be purchased by speculators who understand the high
level of risk that a purchase of our stock entails and who are willing and able
if necessary to hold our stock for an extended period of time, or indefinitely,
and to risk the loss of their entire investment in our stock. If you are a
suitable investor for ISEmployment.com, you should fully understand the
following material risk factors:
IF THE INTERNET PROVES NOT TO BE A VIABLE COMMERCIAL MARKETPLACE, IT COULD HAVE
A MATERIAL ADVERSE EFFECT ON OUR BUSINESS.
We expect a substantial portion of our future revenue to come from the
continued development of our products and services to be distributed over the
Internet. The business use of the Internet is still in its infancy, and it is
possible that the Internet may not prove to be a viable commercial marketplace.
Known issues in this regard include inadequate development of Internet
infrastructure to date, competing technology, delays in the development of new
standards and protocols required for handling increased Internet activity and
the possibility of significant government regulation (locally, nationally and
internationally). Moreover, concerns over the security of Internet transactions
and the privacy of users may inhibit the growth of the Internet, particularly as
a means of conducting commercial transactions. To the extent that our
activities involve the storage and transmission of proprietary information, such
as credit card numbers, security breaches could expose us to a risk of loss or
litigation and possible liability. We cannot assure you that contractual
provisions attempting to limit our liability in such areas will be adequately
implemented or enforceable, or that other parties will accept such contractual
provisions as part of our agreements.
We have not fully resolved some other critical issues concerning our use of
the Internet, including reliability, cost, ease of deployment, administration
and quality of service. This may affect our ability to maintain our business,
expand product marketing, improve communications and increase business
efficiencies.
4
<PAGE>
If we do not successfully develop new and enhanced Internet services and
products, our revenues could be adversely impacted.
Business on the Internet is characterized by:
- rapid technological change;
- frequent changes in user requirements and preferences;
- frequent new product and service introductions embodying new
processes and technologies; and
- evolving industry standards and practices that could
render our information delivery practices obsolete.
Our success will depend partly on our ability to improve our existing
services, develop new product offerings, use Web technology to enhance our
existing product offerings, extend our market reach, and respond to
technological advances, emerging industry standards and competitive offerings.
We cannot assure you that we will be successful in these endeavors.
Evolving Internet technology and standards increase the risk that system
interruptions will occur. Our Internet operations are also vulnerable to
interruption by fire, power loss, telecommunications failure and other events
beyond our control. System interruptions that result in the unavailability of
our Web site, or slower response times for users, could reduce the fees we
collect from consumers and businesses using our database information products
over the Internet.
ISEMPLOYMENT.COM HAS NO OPERATING HISTORY OR ANY REVENUES OR EARNINGS FROM
OPERATIONS.
ISEmployment.com has no significant assets or financial resources.
ISEmployment.com has operated at a loss to date and will, in all likelihood,
continue to have operating expenses without corresponding revenues.
AN INVESTMENT IN OUR COMMON STOCK MAY BE VERY ILLIQUID AND WE HAVE NEVER PAID
CASH DIVIDENDS.
Our shares are not traded on any exchange or bulletin board and there is
currently no broadly followed "established trading market" for our shares, and
we cannot assure you that any such market will ever develop or be maintained.
The absence of an active trading market would reduce the liquidity of an
investment in our shares.
ANY MARKET PRICE FOR OUR SHARES IS LIKELY TO BE VERY VOLATILE, AND NUMEROUS
FACTORS BEYOND OUR CONTROL MAY HAVE A SIGNIFICANT ADVERSE EFFECT ON PRICES.
5
<PAGE>
WE HAVE NEVER PAID CASH DIVIDENDS ON OUR CAPITAL STOCK AND DO NOT ANTICIPATE
PAYING ANY CASH DIVIDENDS FOR THE FORESEEABLE FUTURE.
THE EXCHANGE ACT OF 1934 REQUIRES ADDITIONAL DISCLOSURE RELATING TO THE MARKET
FOR "PENNY STOCK."
A penny stock is generally defined to be any equity security not listed on
NASDAQ or a national securities exchange that has a market price of less than
$5.00 per share, subject to certain exceptions. Our shares are not currently
traded on NASDAQ or a national exchange and, therefore, our shares would be
deemed penny stocks for purposes of the Exchange Act if and at any time our
shares trades below $5.00 per share. In such case, trading in our shares would
be regulated pursuant to Rules 15-g-1 through 15-g-6 and 15-g-9 of the Exchange
Act. Under these rules, brokers or dealers recommending our shares to
prospective buyer would be required, unless an exemption is available, to:
- deliver a lengthy disclosure statement in a form designated by the SEC
relating to the penny stock market to any potential buyers, and obtain a
written acknowledgement from each buyer that such disclosure statement
has been received by the buyer prior to any transaction involving
our shares;
- provide detailed written disclosure to buyers of current price
quotations for our shares, and of any sales commissions or other
compensation payable to any broker or dealer, or any other related
person, involved in the transaction;
- send monthly statements to buyers disclosing updated price information
for any penny stocks held in their accounts, and these monthly
statements must include specified information on the limited market for
penny stocks.
In addition, if we are subject to the penny stock rules, all brokers or
dealers involved in a transaction in which our shares are sold to any buyer,
other than an established customer or "accredited investor," must make a special
written determination that our shares would be a suitable investment for the
buyer, and the brokers or dealers must receive the buyer's written agreement to
purchase our shares, as well as the buyer's written acknowledgement that the
suitability determination made by the broker or dealer accurately reflects the
buyer's financial situation, investment experience and investment objectives,
prior to completing any transaction in our shares.
These Exchange Act rules may limit the ability or willingness of brokers
and other market participants to make a market in our shares and may limit the
ability of our shareholders to sell in the secondary market, through brokers,
dealers or otherwise. We also understand that many brokerage firms will
discourage their customers from trading in shares falling within the "penny
stock" definition due to the added regulatory and disclosure burdens imposed by
these Exchange Act rules.
The SEC from time to time may propose and implement even more stringent
regulatory or disclosure requirements on shares not listed on NASDAQ or on a
national securities exchange. The adoption of the proposed changes that may be
made in the future could have an adverse effect on any trading market for our
shares.
6
<PAGE>
A LARGE PERCENTAGE OF OUR STOCK IS OWNED BY RELATIVELY FEW PEOPLE, INCLUDING
OFFICERS AND DIRECTORS.
As of the date of this prospectus, our officers and directors beneficially
owned or controlled a total of approximately 400,000 shares, or approximately
66% of our outstanding common stock. If you purchase shares covered by this
prospectus, you may be subject to certain risks due to the concentrated
ownership of our common stock. For example, these stockholders could, if they
were to act together, affect the outcome of other stockholder votes which could,
among other things, affect elections of directors, delay or prevent a change in
control or other transaction that might be beneficial to you as a stockholder.
TECHNOLOGY AND INTERNET STOCKS HAVE BEEN AND MAY CONTINUE TO BE VOLATILE.
The market for Internet and technology related stocks generally have been
subject to wide fluctuations in price and volume that often appear to be
unrelated to the operating success of these companies. Such volatility can
present risks for investors. Moreover, such volatility often leads to
securities litigation brought by investors who are seeking to recoup losses
resulting from rapid and significant drops in price and/or volume.
Forward-looking Information
Some of the statements contained in the prospectus summary and throughout
this prospectus regarding matters that are not historical facts, such as
statements regarding ISEmployment.com's growth strategy, are forward-looking
statements as such term is defined in the Securities Act of 1933. Since these
forward-looking statements include risks and uncertainties, actual results may
differ materially from those expressed or implied by such statements. Factors
that could cause actual results to differ materially include, but are not
limited to, those in "Risk Factors," "Management's Discussion and Analysis of
Financial Condition and Plan of Operations" and "Business," as well as those
discussed throughout in this prospectus.
Use Of Proceeds
The principal purpose of this registration statement is to create a more
liquid public market for ISEmployment.com's common stock. While
ISEmployment.com will bear the expenses of the registration of the shares,
ISEmployment.com will not realize any proceeds from any actual resales of the
shares that might occur in the future. All proceeds from any resale will be
received by the selling shareholders.
Market Information
ISEmployment.com's common stock is not listed or quoted at the present
time, and there is no present public market for ISEmployment.com's common stock.
There can be no assurance that a public market for ISEmployment.com's common
stock will ever develop.
7
<PAGE>
Dividend policy
ISEmployment.com has never declared or paid cash dividends on its capital
stock. ISEmployment.com currently intends to retain earnings, if any, to
finance the growth and development of its business and does not anticipate
paying any cash dividends in the foreseeable future.
Holders
As of the date of this prospectus, there are 30 shareholders of record.
Selling Shareholders
The following table sets forth certain information as of the date of this
prospectus, with respect to the Selling Shareholders for whom ISEmployment.com
is registering shares for resale to the public. The first 28 shareholders
received their shares as gifts from Mr. Hodges on January 1, 1998. Messrs.
Murray and Ulakovich received their shares as part of consideration of the
merger between Magical Marketing, Inc. and ISEmployment.com, Inc.
Maximum No. of
Shares Beneficially Shares to be Sold
Name of Owned Prior to Pursuant to this
Security Holder Offering Prospectus
---------------------------- ------------------- -----------------
Frank Anjakos
1971 N. Lindenwood Drive
Tucson, AZ 85712 2,000 2,000
Cindy Baker
P. O. Box 40484
Tucson, AZ 85717 2,000 2,000
Steve Bays
5637 E. Spring Street
Tucson, AZ 85712 2,000 2,000
Brain Delfs
5162 E. Citrus Street
Tucson, AZ 85712 2,000 2,000
James Delfs
3730 N. Tucson Blvd.
Tucson, AZ 85716 2,000 2,000
Sam Erbst
770 N. Dodge #33
Tucson, AZ 85749 2,000 2,000
8
<PAGE>
Maximum No. of
Shares Beneficially Shares to be Sold
Name of Owned Prior to Pursuant to this
Security Holder Offering Prospectus
---------------------------- ------------------- -----------------
Gus Fotinos
6547 N. Turnberry Drive
Tucson, AZ 85718 2,000 2,000
Allyson Fox
61 Kennedy Parkway
Toronto, Canada 2,000 2,000
Audra Guthery
4810 E. Seneca
Tucson, AZ 85712 2,000 2,000
David H. Hack
232 W. Smoot Drive
Tucson, AZ 85705 50,000 50,000
Matthew S. Hodges
1529 N. Desmond
Tucson, AZ 85712 2,000 2,000
Kim Lasater
5531 E. Spring Street
Tucson, AZ 85712 2,000 2,000
Jeff Milton
2519 E. Helen Street
Tucson, AZ 85716 2,000 2,000
Suzanne Morvay
4042 N. Pontatoc Road
Tucson, AZ 85718 2,000 2,000
Mike Neighbors
128 N. Southern Swale Avenue
Tucson, AZ 85748 2,000 2,000
Thomas Nieman
7825 E. Sabino Hallow Court
Tucson, AZ 85749 2,000 2,000
Ron Olson
9969 E. Paseo San Ardo
Tucson, AZ 85747 2,000 2,000
9
<PAGE>
Maximum No. of
Shares Beneficially Shares to be Sold
Name of Owned Prior to Pursuant to this
Security Holder Offering Prospectus
---------------------------- ------------------- -----------------
Mark Polifka
1132 Mohawk
Topanga, CA 90290 2,000 2,000
Sophie Radecki
207 Hallam Street
Toronto, Canada M6H1Y6 2,000 2,000
Jonathan Roberts
2102 N. Donner Avenue
Tucson, AZ 85749 50,000 50,000
Lowell E. Robinson
P. O. Box 23
Arivaca, AZ 85601 2,000 2,000
Monica Romero
2528 W. Criswell Court
Tucson, AZ 85745 2,000 2,000
Melissa Saucedo
7019 W. Avondale
Tucson, AZ 85743 2,000 2,000
Kevin Sherlock
4042 N. Pontatoc Road
Tucson, AZ 85718 50,000 50,000
Howard Smith
4050 N. Hiddencove Place
Tucson, AZ 85749 2,000 2,000
John Sylvester
10222 E. Sylvester Road
Hereford, AZ 85615 2,000 2,000
Raymond Willey
1192 Joseph Ct.
Ripton, CA 95366 2,000 2,000
Jennifer L. Worden
9055 E. Catlina Highway
No. 5206
Tucson, AZ 85749 2,000 2,000
10
<PAGE>
Maximum No. of
Shares Beneficially Shares to be Sold
Name of Owned Prior to Pursuant to this
Security Holder Offering Prospectus
---------------------------- ------------------- -----------------
Scott Murray
213-380 Pelissier Street
Windsor, Ontario N9A 6W8
Canada 200,000 200,000
Frank Ulakovich
213-380 Pelissier Street
Windsor, Ontario N9A 6W8
Canada 200,000 200,000
All of the shares offered by this prospectus may be offered for resale, from
time to time, by the selling shareholders in one or more private or negotiated
transactions, in open market transactions in the over-the-counter market, or
otherwise, or by a combination of these methods, at fixed prices that may be
changed, at market prices prevailing at the time of the sale, at prices related
to such market prices, at negotiated prices, or otherwise. The selling
shareholders may effect these transactions by selling their shares directly to
one or more purchasers or to or through broker-dealers or agents. The
compensation to a particular broker-dealer or agent may be in excess of
customary commissions. Each of the selling shareholders may be deemed an
"underwriter" within the meaning of the Securities Act in connection with each
sale of shares. The selling shareholders will pay all commissions, transfer
taxes and other expenses associated with their sales.
Management's Discussion and Analysis of Financial
Condition and Plan of Operations
We ask that you read the following discussion in conjunction with
ISEmployment.com's Consolidated Financial Statements, including the Notes
thereto, which appear elsewhere in this prospectus.
Business
ISEmployment.com is a development stage company, which will provide on-line
human resources and recruiting services for the Information Systems industry.
ISEmployment.com's website and on-line service is anticipated to be operational
by the first quarter of 2001. ISEmployment.com's on-line human resources and
recruiting services specifically addresses the tight labor market in the United
States for Information System Professionals and also provides a cost effective
mechanism for employers to access the relative abundance of qualified foreign
candidates. This service is different from the job and resume posting sites
currently available on the Internet by providing virtual human resources center
and a virtual recruitment and selection system. The system also contains an
advance module that simplifies the hiring of foreign workers.
11
<PAGE>
ISEmployment.com's site is a virtual human resource site designed to
automate the recruiting and selection process. Our site requires the candidate
to input their personal information, which includes name, address, and location
preference, wage expectancy and job position sought. A candidate is required to
detail his or her hardware and software experience, showing both years
experience as well as age of experience. This information is gathered by a
precise technical application, a project resume and a section which allows the
candidate to "paste" their version of their resume (candidates' resumes will be
searched using a "keyword" search application). The candidate will then be
required to complete a soft skill evaluation section of the database. This
section will allow the potential employer a brief insight into the candidate's
personality. The system will then ask the candidate to input three work-related
reference, that will be verified by ISEmployment.com's human resources
assistants. Once completed, the reference checks will be available for
potential employees to view on-line. If applicable, the candidate will be asked
to fill out the immigration questionnaires that will be presented as a form
letter once the process is complete. The pre-immigration screen will cover
questions related to inadmissibility issues, such as prior arrests, convictions
and refused entry into the United States of America. This visa assistance is
only for TN (NAFTA) visas only. If the candidate requires additional
information or immigration assistance, they will be linked automatically to
approved immigration lawyers. Once the data is entered into the database, one
of ISEmployment.com's human resources assistants will contact the candidate to
check for truth and accuracy. Once this is completed, the information becomes
active in the database and the applicant will be allowed to modify the
application as time goes on. The system will automatically e-mail each
candidate every fifteen days, requesting his or her status and availability.
An employer interested in the site is requested to complete a site
registration set up questionnaire and is issued a password. Once the set up is
complete, the employer will be asked to complete the profile section, which will
provide background information for candidates to use prior to an interview.
When the employer is ready to search the database, they will be prompted by the
system to log in using their assigned password. Once accepted, the employer
will then be allowed to input the skill set(s) that they are seeking along with
the years of experience required. The employer will then initiate the search
query and the system will produce a list of candidates, their skills that match
the query, along with the percentile rank of the match of skills to the query.
The output at this point will not offer personal information, references or
candidate qualifiers. The employer will only see the skill set synopsis, which
consist of the educational history, project resume, the candidates' personal
resume and soft skill evaluation. Once the employer selects the candidate(s)
that they wish to interview, their account automatically gets debited for each
selection. The employer is notified of the charge and the contact information
for each candidate is then given. Along with the contact information, the
system will allow the employer access to each candidate's audio/video clip and
reference checks.
ISEmployment.com will also offer a "hr tools" section which will allow
registered users access to chat sessions and human resource links. The chat
sessions will run at posted intervals and will offer free advice on current
human resource issues, including such issues as immigration, recruiting and
relocation. Each chat session will be headed by an accredited professional in
the field. The "hr tools" will offer the candidate numerous help pages like the
dos and don'ts of interviews, salary calculators and relocation information.
12
<PAGE>
History
ISEmployment.com was founded by Messrs. Murray and Ulakovich on March 7,
2000. Messrs. Murray and Ulakovich both have backgrounds in the traditional
recruitment and placement industry and determined there was an opportunity to
provide such services on-line. On June 30, 2000, ISEmployment.com and Magical
Marketing, Inc., a "blank check" company, merged in a share exchange that
resulted in Magical Marketing acquiring all of the issued outstanding capital
stock of ISEmployment.com for an aggregate of 4000,000 shares of Magical
Marketing. In connection with the merger, Magical Marketing changed its name to
ISEmployment.com, Inc.
Competition
The market for online recruiting services is relatively new, intensely
competitive and rapidly evolving. There are minimal barriers to entry, and
current and new competitors can launch new web sits and add content at
relatively low costs within relatively short time periods. We expect
competition to persist and intensify and the number of competitors to increase
significantly in the future. We compete against other online recruiting
services, such as Monster.com, Headhunter.net, Career Path and Career Mosaic, as
well as corporate Internet sites, and not-for-profit web sites operated by
individuals, educational institutions and governments. In addition to this
online competition, we compete against a variety of companies that provide
similar content through one or more media, such as classified advertising, radio
and television. Many of our current and potential competitors, including those
mentioned above, have significantly greater financial, technical and marketing
resources, longer operating histories, better name recognition and more
experience that we do. Many of our competitors also have established
relationships with employers, recruiters and other job posters.
To compete successfully, we must continue to attract more employers,
recruiters and job seekers, and generate fees. The competitive factors
attracting employers, recruiters and job seekers to our web site include the
quality of presentation and the relevance, timeliness, depth and breadth of
recruiting information and services offered on, and the ease of use of, our web
site. Our competitors' services may be sufficiently attractive to employers,
recruiters and job seekers to dissuade them from using our web site. If we are
unable to attract a significant number of employers, recruiters and job seekers
to our web site, our business, financial condition and results of operation will
suffer.
The Market
The emergence of the Internet and the growth in its use has made it an
attractive medium for online recruiting. We believe online recruiting is
superior to traditional means of recruiting and job searching because it is
interactive, easily accessible, timely and more cost-effective. As Internet
usage becomes more widespread, we expect companies from a broad range of
industries to increase their online recruiting efforts. As the online
recruiting market matures, we believe that employers and recruiters will
increasingly utilize those online recruiting services that enable them to access
a large number of job seekers and exercise a high degree of control over the
exposure of their job opportunities. We believe our product and services will
positions us to take advantage of this market opportunity.
13
<PAGE>
Growth Strategy
ISEmployment.com's objective is to be one of the leading providers of
online recruiting services to employers and recruiters, especially within the
information systems niche of that field. The industry is currently served by a
small number of on-line systems that are interactively passive and have limited
capability. In contrast, ISEmployment.com's system is an advanced search engine
with a unique immigration function that will allow employers to access
additional qualified candidates. In addition to providing an advance search
engine, the key elements of ISEmployment.com's strategy are the following:
INCREASE AWARENESS OF ISEMPLOYMENT.COM. We plan to increase awareness of
the ISEmployment.com brand through an aggressive marketing campaign that
combines a combination of online and traditional advertising, direct marketing
and strategic relationships.
AGGRESSIVELY BUILD AND EXPAND OUR SALES FORCE. We plan to rapidly expand
our direct sales and telephone sales efforts by developing and then adding to
our existing sales force and by opening additional sales offices in key
metropolitan areas to further penetrate these markets.
PROMOTE AND ENHANCE WEB SITE FUNCTIONALITY. We intend to make the process
of posting and searching job opportunities on our web site easier and faster by
increasing the usability and functionality of our web site. With the re-launch
of our web site planned for January 2001 we expect to create this ease of use
for our customers.
DEVELOP STRATEGIC RELATIONSHIPS. We will enter into and evaluate strategic
relationships as a means to increase traffic to our web site, enhance visibility
of job opportunities, increase awareness of the ISEmployment.com brand, and
provide marketing and cross-promotional opportunities. We will also continue to
use our relationship with ITR and its ability to accentuate ISEmployment.com's
business model and presence on the Internet.
ACQUISITIONS OF COMPLEMENTARY BUSINESSES OR TECHNOLOGIES. We will explore
acquisition and investment opportunities if we believe they will enable us to
accelerate our growth plan, add new content, develop new technologies or
penetrate new markets. We will also pursue others within our niche market that
may desire to become part of the ISEmployment.com brand.
Government Regulation
There are an increasing number of laws and regulations pertaining to the
Internet, including laws or regulations relating to user privacy, liability for
information retrieved from or transmitted over the Internet, online content
regulation, user privacy and domain name registration. Moreover, the
applicability to the Internet of existing laws governing issues such as
intellectual property ownership and infringement, copyright, patent, trademark,
trade secrets, obscenity, libel, employment and personal privacy is uncertain
and developing. We may become subject to burdensome government regulation,
which may add additional costs to operating our business on the Internet or
decrease demand for our services.
14
<PAGE>
PRIVACY CONCERNS. Government agencies are considering adopting regulations
regarding the collection and use of personal identifying information obtained
from individuals when accessing web sites. While we have implemented and intend
to implement additional programs designed to enhance the protection of the
privacy of its users, these programs may not conform to any regulations adopted
by these agencies. In addition, these regulatory and enforcement efforts may
adversely affect our ability to collect demographic and personal information
from users, which could have an adverse effect on our ability to provide
advertisers with demographic information. The European Union has adopted a
directive that imposes restrictions on the collection and use of personal data.
The directive could impose restrictions that are more stringent than current
Internet privacy standards in the United States. The directive may adversely
affect the activities of businesses that engage in data collection from users in
European Union member countries.
DOMAIN NAMES. Domain names are the user's Internet "addresses." The
current system for registering, allocating and managing domain names has been
the subject of litigation and of proposed regulatory reform. Although we have
registered "ISEmployment.com" as a domain name, third parties may bring claims
for infringement against us for the use of their trademark. There can be no
assurance that our domain name will not lose its value, or that we will not have
to obtain entirely new domain names in addition to or in lieu of our current
domain names if reform efforts result in a restructuring in the current system.
JURISDICTIONS. Due to the global nature of the Internet, it is possible
that, although our transmissions over the Internet originate primarily in
Windsor, the governments of other states and foreign countries might attempt to
regulate our business activities. In addition, because our service is available
over the Internet in multiple states and foreign countries, these jurisdictions
may require us to qualify to do business as a foreign corporation in each of
these states or foreign countries, which could subject us to taxes and other
regulations.
Employees
ISEmployment.com currently has 2 employees. ISEmployment.com relies
heavily on its current officers in operating its business.
Property
ISEmployment.com's principal executive offices are located in 2400 square
feet at 213-380 Pelissier Street, Windsor, Ontario, Canada. The Company leases
the executive offices for $20,000 a year from Mr. Murray, President of the
Company. Management believes that the terms of this lease are as favorable as
those that the Company could obtain from an unaffiliated party. The Company has
recently entered into a lease to rent additional office space of 4100 square
feet at 2405 Ouellette Avenue, Windsor, Ontario, Canada. The new lease will
cost $51,200 per year. The Company to date has not used the additional space,
however, it does plan to use the space during the first quarter of 2001.
15
<PAGE>
Litigation
There is no outstanding material litigation in which the Company is
involved and the Company is unaware of any threatened actions or claims against
it.
Description Of Securities
The Company has an authorized capitalization of 100,000,000 shares of
common stock, $.001 par value per share ("Common Stock").
Common Stock
Following the Share Exchange, there were 600,000 shares of the Company's
Common Stock issued and outstanding. The holders of the Company's common stock
are entitled to one non-cumulative vote for each share held of record on all
matters submitted to a vote of shareholders. The holders of common stock are
entitled to receive ratably any dividends that are declared by the Company's
Board of Directors out of funds legally available therefor and are entitled to
share ratably in all of the assets of the Company available for distribution to
holders of Common Stock upon liquidation, dissolution or winding up of the
affairs of the Company. Holders of Company's Common Stock have no preemptive,
subscription or conversion rights and there are no redemption or sinking fund
provisions or rights applicable thereto.
Transfer Agent
The transfer agent for the Company's Common Stock is Holladay Stock
Transfer Company, 2939 North 67th Place, Scottsdale, Arizona 85251.
Dividend; Market For The Company's Securities
During the last two years, no dividends have been paid on the Company's
stock and the Company does not anticipate paying any cash dividends in the
foreseeable future. Although it is the Company's intention to utilize all
available funds for the development of the Company's business, no restrictions
are in place, which would limit or restrict the ability of the Company to pay
dividends.
There is no public market for the Company's Common Stock. The Company's
Common Stock may be traded in over-the-counter market in the near future;
however, there can be no assurance of when or as to price at which the trading
in Company's Common Stock will occur.
Management
Information as to the directors and officers of the Company is as follows:
16
<PAGE>
Scott Murray has served as a director of ISEmployment.com, Inc. since its
inception and became Co-Chief Executive Officer at that time. Mr. Murray has
served as President of International Technical Recruiting (ITR), a traditional
recruitment and placement firm that represents many Fortune 500 companies from
1995 through the first quarter of 2000. Mr. Murray was a Co-Founder of ITR,
which was established in the year 1995. Mr. Murray has also assumed the role of
Chief Financial Officer of the Company until a suitable replacement can be
found. Mr. Murray is a co-founder of the Company. Mr. Murray will share part of
his responsibilities with his Co-Chief Executive Officer Mr. Ulakovich; these
responsibilities include strategic planning, quality control and management of
the Company's personnel. Mr. Murray serves Chairman of the Society of
Manufacturing Engineers and holds a seat on the Regional Committee for the
Society of Manufacturing Engineers.
Frank Ulakovich has served as a Chairman of the Board of ISEmployment.com,
Inc. since its inception and became Co-Chief Executive Officer at that time.
Mr. Ulakovich has served as Vice-President Technical Recruiting of International
Technical Recruiting (ITR), a traditional recruitment and placement firm that
represents many Fortune 500 companies from 1995 through the first quarter of
2000. Mr. Murray directed the operations and expansion of ITR's technical
division with the assistance and guidance of Mr. Murray. Mr. Murray was a
Co-Founder of ITR, which was established in the year 1995. Mr. Ulakovich will
share part of his responsibilities with his Co-Chief Executive Officer Mr.
Murray; these responsibilities include strategic planning, quality control and
management of the Company's personnel. Mr. Ulakovich is a former President of
the Canadian Information Processing Society. Mr. Ulakovich was a professor of
Information Systems at Saint Clair College.
Name Age Position
---- --- --------
Scott F. Murray 30 President, Co-CEO and Treasurer
Frank Ulakovich 29 Chairman of the Board, Co-CEO and Secretary
Executive Compensation
Scott F. Murray and Frank Ulakovich each receive $48,000 a year each in
salary. They do not receive any other benefits. It is anticipated that in the
future senior management will be provided additional benefits comparable for
their industry. Mr. Murray's and Mr. Ulakovich's salary is included in the
expense System Development Cost classification within the Company's profit and
loss statement.
Principal shareholders
The following table contains information regarding the shareholdings of the
Company's current directors and executive officers and those persons or entities
who beneficially own more than 5% of the Company's common stock based on 600,000
shares issued and outstanding.
<TABLE>
<CAPTION>
Amount of Common Stock Beneficially Owned Percent of Common Stock Beneficially Owned
----------------------------------------- ------------------------------------------
Directors and Officers
<S> <C> <C>
Frank Ulakovich 200,000 33%
Scott Murray 200,000 33%
</TABLE>
17
<PAGE>
Related Transactions
Transactions with Management and Related Transactions
Except for the lease between Mr. Murray and the Company for the Company's
executive offices described above in Property, no member of the management,
officers, or directors is or has a direct or indirect interest in a material
transaction or contract with the Company.
Indebtedness of Management
No member of the management, officers, or directors is or has been indebted
to the Company. No director or officer is personally liable for the repayment
of amounts of any financing received by the Company.
Indemnification Of Directors And Officers
Wyoming law authorizes a Wyoming corporation to indemnify its officers and
directors against claims or liabilities arising out of such person's conduct as
officers or directors if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
Company. The Articles of Incorporation provide for indemnification of the
directors of the Company. In addition, the Bylaws of the Company provide for
indemnification of the directors, officers, employees or agents of the Company.
In general, these provisions provide for indemnification in instances when such
persons acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the Company.
Shares Eligible For Future Sale
Upon the effectiveness of this registration statement, ISEmployment.com
will have 600,000 shares of common stock outstanding and registered for resale
by the selling shareholders under the Securities Act of 1933.
Prior to this offering, no public trading market has existed for
ISEmployment.com's shares of common stock. The sale, or availability for sale,
of substantial amounts of common stock in the public trading market could
adversely affect the market prices for ISEmployment.com's common stock.
Plan of Distribution
To our knowledge, none of the selling shareholders has made any arrangement
with any brokerage firm for the sale of the shares. We have been advised by the
selling shareholders that they presently intend to dispose of the shares through
broker-dealers in ordinary brokerage transactions at market prices prevailing at
the time of the sale.
Any broker-dealers or agents who act in connection with the sale of the
shares may be deemed to be underwriters. Any discount, commissions or
concessions received by any broker-dealers or agents may be deemed to be
underwriting discounts and commissions under the Securities Act.
18
<PAGE>
ISEmployment.com has not registered its shares for resale under the
securities or "blue sky" laws of any state and has no plans to register or
qualify its shares in any state. Current shareholders and persons who desire to
purchase the shares in any trading market that may develop in the future, should
be aware that there may be significant state blue sky restrictions upon the
ability of new investors to purchase the securities. These restrictions could
reduce the size of any potential trading market. Under federal law, non-issuer
trading or resale of ISEmployment.com's common stock may be exempt from most
state registration or qualification requirements. However, some states may
continue to restrict the ability to register or qualify ISEmployment.com's
common stock for both initial sale and secondary trading by regulations
prohibiting or imposing limitations on the sale of securities of blank check
issuers.
ISEmployment.com's selling efforts, and any secondary trading market, which
may develop, may only be conducted in those jurisdictions where an applicable
exemption is available or where the shares have been registered.
ISEmployment.com has no current plan to register its shares for offer and sale
within any state. ISEmployment.com does not anticipate that a secondary trading
market for the shares will develop in any state until after the consummation of
a merger or acquisition, if at all. However, investors should be aware that
state law limitations might affect the transferability or the ability to resell
the shares. ISEmployment.com has not taken, and does not contemplate taking,
any steps to ensure compliance with state securities laws.
ISEmployment.com does not have lock-up agreements with its shareholders
affirming that they will not sell their respective shares until such time as
ISEmployment.com has successfully consummated a merger or acquisition and
ISEmployment.com is no longer classified as a blank check company.
Legal Matters
The validity of the common stock offered hereby will be passed upon for
ISEmployment.com by Robert H. Domico, Esq.
Experts
The Financial Statements and schedules of ISEmployment.com as of September
30, 1999 and 1998 included in this prospectus and elsewhere in the Registration
Statement have been audited by Robison, Hill & Co., independent public
accountants for ISEmployment.com, as set forth in its report herein, and are
included in reliance upon such report, given upon the authority of such firm as
experts in accounting and auditing.
Additional Information
ISEmployment.com has filed with the SEC a registration statement on Form
SB-2 under Securities Act of 1933, as amended, with respect to 600,000 of its
issued and outstanding shares of common stock. This prospectus, which forms a
part of the registration statement, does not contain all of the information set
forth in the registration statement as permitted by applicable SEC rules and
19
<PAGE>
regulations. Statements in this prospectus about any contract, agreement or
other document are not necessarily complete. With respect to each such
contract, agreement, or document filed as an exhibit to the registration
statement, reference is made to the exhibit for a more complete description of
the matter involved, and each such statement is qualified in its entirety by
this reference.
The registration statement may be inspected without charge and copies may
be obtained at prescribed rates at the SEC's public reference facilities at
Judiciary Plaza, 450 Fifth Street NW, Room 1024, Washington, DC 20549, or on the
Internet at http://www.sec.gov.
ISEmployment.com will furnish to its shareholders annual reports containing
audited financial statements reported on by independent public accountants for
each fiscal year and make available quarterly reports containing unaudited
financial information for the first three quarters of each fiscal year.
20
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Independent Auditor's Report. . . . . . . . . . . . . . . . . . . . . . F - 2
Balance Sheets
September 30, 1999 and 1998 . . . . . . . . . . . . . . . . . . . . . F - 3
Statements of Operations for the
Years Ended September 30, 1999 and 1998 . . . . . . . . . . . . . . . F - 4
Statement of Stockholders' Equity for the
Years Ended September 30, 1999 and 1998 . . . . . . . . . . . . . . . F - 5
Statements of Cash Flows for the
Years Ended September 30, 1999 and 1998 . . . . . . . . . . . . . . . F - 6
Notes to Financial Statements for the
Years Ended September 30, 1999 and 1998. . . . . . . . . . . . . . . F - 7
Interim Financial Information:
Balance Sheets
June 30, 2000 and April 30, 2000 Proforma . . . . . . . . . . . . . F - 10
Statements of Operations for the
Nine Months June 30, 2000 and 1999. . . . . . . . . . . . . . . . . F - 11
Statement of Stockholders' Equity for the
Nine Months Ended June 30, 2000 . . . . . . . . . . . . . . . . . . .F - 12
Statements of Cash Flows for the
Nine Months June 30, 2000 and 1999. . . . . . . . . . . . . . . . . .F - 13
Notes to Financial Statements for the
Nine Months Ended June 30, 2000 and 1999. . . . . . . . . . . . . . .F - 14
Proforma Financial Information - Accounting
For the Merger between ISEmployment.com, Inc.
And Magical Marketing, Inc., including
Auditors Report as of April 30, 2000. . . . . . . . . . . . . . . . .F - 17
F-1
<PAGE>
ROBISON, HILL & CO., A PROFESSIONAL CORPORATION,
Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
Magical Marketing, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheets of Magical Marketing, Inc. (a
development stage company) as of September 30, 1999 and 1998,and the related
statements of operations, stockholders' equity, and cash flows for the two years
ended September 30, 1998. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Magical Marketing, Inc. (a
development stage company) as of September 30, 1999 and 1998, and the results of
its operations and its cash flows for the two years ended September 30, 1999 in
conformity with generally accepted accounting principles.
Respectfully submitted
Robison, Hill & Co.
/s/ Robison, Hill & Co.
Certified Public Accountants
Salt Lake City, Utah
November 23, 1999
F-2
<PAGE>
ISEMPLOYMENT.COM, INC.
(Fka MAGICAL MARKETING, INC.)
(A Development Stage Company)
BALANCE SHEETS
September 30,
1999 1998
Assets. . . . . . . . . . . . . . . $ -- $ --
Liabilities
Accounts Payable $ -- $ 50
Shareholders' Equity
Common Stock, Par Value $.001
Authorized 100,000,000 shares
Issued 1,000,000 shares at
September 30, 1999 and 1998 . . . 1,000 1,000
Paid-In Capital . . . . . . . . . . 75 --
Retained Deficit. . . . . . . . . . (1,075) (1,050)
Deficit Accumulated During the
Development State . . . . . . . . -- --
Total Stockholders' Equity -- (50)
Total Liabilities and
Shareholders' Equity. . . . . . . $ -- $ --
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
ISEMPLOYMENT.COM, INC.
(Fka MAGICAL MARKETING, INC.)
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Cumulative since
For the Year ended inception of
September 30, development
1999 1998 stage
<S> <C> <C> <C>
Revenues $ - $ - $ -
Expenses 25 25 -
Net Loss $ (25) $ (25) $ -
Basic & Diluted loss per share $ - $ -
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
ISEMPLOYMENT.COM, INC.
(Fka MAGICAL MARKETING, INC.)
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EOUITY
FOR THE YEARS ENDED SEPTEMBER 30, 1999 AND 1998
Deficit
Accumulated
During
Common Stock Paid-In Retained Development
Shares Par Value Capital Deficit Stage
<S> <C> <C> <C> <C> <C>
Balance at February 27, 1997
(Inception) - $ - $ - $ - $ -
Net Loss - - - (1,025) -
Balance at September 30, 1997 - - - (1,025) -
November 4, 1997 Issuance of
Stock for Services and
Payment of Accounts payable 1,000 1,000 - - -
Net Loss - - - (25) -
Balance at September 30, 1998
As originally reported 1,000 1,000 - (1,050) -
Retroactive adjustment for
1,000 to 1 stock split
October 20, 1999 999,000 - - - -
Restated balance
October 1, 1998 1,000,000 1,000 - (1,050) -
Capital contributed by
Shareholder - - 75 - -
Net Loss - - - (25) -
Balance at
September 30, 1999 1,000,000 $ 1,000 $ 75 $ (1,075) $ -
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
ISEMPLOYMENT.COM, INC.
(Fka MAGICAL MARKETING, INC.)
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Cumulative
since
For the Years Ended Ended inception of
September 30, development
1999 1998 stage
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net Loss. . . . . . . . . . . . . . . . . . . . . $ (25) $ (25) $ --
Increase (Decrease) in
Accounts Payable . . . . . . . . . . . . . . . . (50) 25 --
Net Cash Used in
Operating activities . . . . . . . . . . . . . . (75) -- --
CASH FLOWS FROM
INVESTING ACTIVITIES:
Net Cash provided by
Investing activities . . . . . . . . . . . . . . -- -- --
CASH FLOWS FROM
FINANCING ACTIVITIES:
Capital contributed
By shareholder . . . . . . . . . . . . . . . . . 75 -- --
Net Cash provided by
Financing activities . . . . . . . . . . . . . . 75 -- --
Net (Decrease) in
Cash and Cash Equivalents. . . . . . . . . . . . -- -- --
Cash and Cash Equivalents
At Beginning of Period . . . . . . . . . . . . . -- -- --
Cash and Cash Equivalents
At End of Period . . . . . . . . . . . . . . . . $ -- $ -- $ --
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest . . . . . . . . . . . . . . . . . . . . $ -- $ -- $ --
Franchise and income taxes . . . . . . . . . . . $ -- $ -- $ --
</TABLE>
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AN
FINANCING ACTIVITIES: None
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
ISEMPLOYMENT.COM, INC.
(Fka MAGICAL MARKETING, INC.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 1999 AND 1998
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for Magical Marketing, Inc. is presented to
assist in understanding the Company's financial statements. The accounting
policies conform to generally accepted accounting principles and have been
consistently applied in the preparation of the financial statements.
Organization and Basis of Presentation
The Company was incorporated under the laws of the State of Wyoming on February
27, 1997. The Company ceased all operating activities during the period from
February 27, 1997 to October 20, 1999 and was considered dormant. Since October
20, 1999, the Company is in the development stage, and has not commenced planned
principal operations.
Nature of Business
The company has no products or services as of September 30, 1999. The Company
was organized as a vehicle to seek merger or acquisition candidates. The
Company intends to acquire interests in various business opportunities, which in
the opinion of management will provide a profit to the Company.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents to the extent the funds are not being held for investment
purposes.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles required management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Loss per Share
The reconciliations of the numerators and denominators of the basic loss per
share computations are as follows:
F-7
<PAGE>
Income Shares Per-Share
(Numerator) (Denominator) Amount
For the year ended September 30, 1999:
Basic Loss per Share
Loss to common shareholders $ (25) 1,000,000 $ -
For the year ended September 30, 1998:
Basic Loss per Share
Loss to common shareholders $ (25) 1,000,000 $ -
The effect of outstanding common stock equivalents would be anti-dilutive for
September 30, 1999 and September 30, 1998 and are thus not considered.
NOTE 2 - INCOME TAXES
As of September 30, 1999, the Company had a net operating loss carryforward for
income tax reporting purposes of approximately $1,000 that may be offset against
future taxable income through 2011. Current tax laws limit the amount of loss
available to be offset against future income when a substantial change in
ownership occurs. Therefore, the amount available to offset future taxable
income will be limited. No tax benefit has been reported in the financial
statements, because the Company believes there is a 50% or greater chance the
carryforwards will expire unused. Accordingly, the potential tax benefits of
the loss carryforwards are offset by a valuation allowance of the same amount.
NOTE 3 - DEVELOPMENT STAGE COMPANY
The Company has not begun principal operations and as is common with a
development stage company, then Company has had recurring losses during its
development stage.
NOTE 4 - COMMITMENTS
As of September 30, 1999 all activities of the Company have been conducted by
corporate officers from either their homes or business offices. Currently,
there are no outstanding debts owed by the Company for the use of these
facilities and there are no commitments for future use of the facilitates.
NOTE 5 - STOCK SPLIT
On October 20, 1999 the Board of Directors authorized 1,000 to 1 stock split,
changed the authorized number of shares to 100,000,000 shares and the par value
to $.001 for the Company's common stock. As a result of the split, 999,000
shares were issued. All references in the accompanying financial statements to
the number of common shares and per-share amounts for 1999 and 1998 have been
restated to reflect the stock split.
F-8
<PAGE>
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Balance Sheets
June 30, September 30,
2000 1999
=============== ===============
(Unaudited)
ASSETS
Current Assets:
Cash $ 1,203 $ -
--------------- ---------------
Total current assets 1,203 -
Deposits
8,442 -
--------------- ---------------
Total assets $ 9,645 $ -
=============== ===============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable $ 2,200 $ -
Advances payable 44,581 -
Loans payable 214,866 -
--------------- ---------------
Total current liabilities 261,647 -
--------------- ---------------
Stockholders' Deficit:
Common stock; $.001 par value;
1000,000,000 shares authorized;
600,000 and 1,000,000 shares issued
and outstanding 600 1,000
Paid in Capital (600) 75
Deficit accumulated during the
development stage (252,002) (1,075)
--------------- ---------------
Total stockholders' deficit (252,002) -
--------------- ---------------
Total liabilities
and stockholders' deficit $ 9,645 $ -
=============== ===============
See accompanying notes to financial statements
F-9
<PAGE>
<TABLE>
<CAPTION>
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
(Unaudited)
Cumulative From
For the Three Months For the Nine Months (February 27,
Ended Ended 1997) Inception
June 30, June 30, through June 30,
2000
2000 1999 2000 1999 Development Stage
-------------------------------------------------------------------
(Proforma) (Proforma)
<S> <C> <C> <C> <C> <C>
Revenues $ - $ - $ - $ - $ -
-------------------------------------------------------------------
Expenses
System development costs 72,725 - 223,429 - 222,549
General and Administrative 5,800 25 27,498 25 29,453
-------------------------------------------------------------------
Net Loss $ 79,525 $ 25 $ 250,927 $ 25 $ 252,002
=========== ========== ========== ========== ==================
Basic & Diluted loss per share $ .08 $ - $ .25 $ - $ .32
=========== ========== ========== ========== ==================
Weighted average basic and diluted
Shares outstanding 1,000,000 1,000,000 1,000,000 1,000,000 777,778
=========== ========== ========== ========== ==================
</TABLE>
See accompanying notes to financial statements
F-10
<PAGE>
<TABLE>
<CAPTION>
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EOUITY
FOR THE NINE MONTHS JUNE 30, 2000
Deficit
Accumulated
During
Common Stock Paid-In Development
Shares Par Value Capital Stage
<S> <C> <C> <C> <C>
Balance at September 30, 1998
As originally reported 1,000 $ 1,000 $ - $ (1,050)
Retroactive adjustment for
1,000 to 1 stock split
October 20, 1999 999,000 - - -
Restated balance
October 1, 1998 1,000,000 1,000 - (1,050)
Capital contributed by
Shareholder - - 75 -
Net Loss - - - (25)
Balance at
September 30, 1999 (Audited) 1,000,000 1,000 75 (1,075)
Capital contributed by
Shareholder - - 880 -
Cancellation of shares
Upon merger transaction (800,000) (800) - -
Exchange of shares
Upon to merger transaction
Net of subscription
receivable 400,000 400 (400) -
Excess of additional
Paid in capital - - (1,155) -
Net Loss (pre merger) - - - (880)
Net Loss (post merger) - - - (250,047)
Balance at
June 30, 2000 (Unaudited) 600,000 $ 600 $ (600) $(252,002)
</TABLE>
See accompanying notes to financial statements
F-11
<PAGE>
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Statement of Cash Flows
(unaudited)
For the Nine Months ended
June 30, June 30,
2000 1999
========== ===========
(Proforma)
Cash flows from operating activities:
Net loss $(250,927) $ (25)
Adjustments to reconcile net loss to
net cash used in operating activities:
System development expense incurred
by assumption of a related party loan 96,555 -
System development expense incurred
by assumption of advances payable 44,581 -
Par value in excess of paid in capital (1,955) -
Increase in deposits (8,442) -
Increase in accounts payable 2,200 25
---------- ----------
Net cash used in operating activities (117,108) -
---------- ----------
Cash flows from financing activities:
Proceeds from loans payable 214,866 -
Repayment of a related party loan (96,555) -
Capital contribution by shareholder 880 -
---------- ----------
Net cash provided by financing activities 119,191 -
---------- ----------
Increase in cash 1,203 -
Cash at beginning of period - -
---------- ----------
Cash at end of period $ 1,203 $ -
========== ==========
See accompanying notes to financial statements
Supplemental disclosure of non-cash investing and financing activities:
--------------------------------------------------------------------------------
ISEmployment.com, Inc. incurred system development expenses by assuming a loan
payable in conjunction with the development of the concept, programming,
database and web site that are intended to be used by the Company.
--------------------------------------------------------------------------------
F-12
<PAGE>
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
As of June 30,2000
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for ISEmployment.com, Inc. (the
Company) (a development stage company) is presented to assist in understanding
the Company's financial statements. The accounting policies conform to
generally accepted accounting principles and have been consistently applied in
the preparation of the financial statements.
Interim Reporting
The unaudited financial statements as of June 30, 2000 and for the three
and nine month periods then ended reflect, in the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to
fairly state the financial position and results of operations for the three and
nine months. Operating results for interim periods are not necessarily
indicative of the results for the year ending September 30, 2000.
Organization and Basis of Presentation
The Company was incorporated under the laws of the State of Wyoming on
February 27, 1997. The Company ceased all operating activities during the
period from February 27, 1997 to October 20, 1999 and was considered dormant.
On June 30, 2000, ISEmployment.com, Inc. (ISEmployment), a Delaware corporation,
and Magical Marketing, Inc. (Magical Marketing), merged. Magical Marketing
became the surviving corporation and adopted the name ISEmployment.com, Inc.
The Company issued 400,000 shares of common stock to the shareholders of the
former ISEmployment.com, Inc. corporation and the Company's majority stockholder
cancelled his 800,000 shares of common stock upon the merger.
Nature of Business
The Company has no products or services that were available as of June 30,
2000. All expenses were incurred in developing new technology for web-design
which the Company expects to bring to market in the near future.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
F-14
<PAGE>
NOTE 2 - INCOME TAXES
Deferred taxes are provided on a liability method whereby deferred tax
assets are recognized for deductible temporary differences and deferred tax
liabilities are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amount of assets and
liabilities and their tax bases. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that
some portion or all of the deferred tax assets will not be realized. Deferred
tax assets and liabilities are adjusted for the effects of changes in tax laws
and rates on the date of enactment.
NOTE 3 - DEVELOPMENT STAGE COMPANY
The Company has not begun principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
The Company entered into a five-year lease for office facilities in
Windsor, Ontario on June 1, 2000. The lease is for a yearly rent of $42,000.
The Company has minimal capital resources presently available to meet
obligations that normally can be expected to be incurred by similar companies,
and with which to carry out its planned activities. These factors raise doubt
about the Company's ability to continue as a going concern.
Management is seeking additional equity financing to fund planned
operations; management believes actions currently being taken provide the
opportunity for the Company to continue as a going concern. However, there is
no assurance that the Company will be able to obtain such financing. The
accompanying financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
NOTE 5 - STOCK SPLIT AND OTHER TRANSACTIONS
On October 20, 1999 the Board of Directors authorized a 1,000 for 1 stock
split, and changed the authorized number of shares to 100,000,000 shares and the
par value to $.001. As a result of the split, an additional 999,000 shares were
issued. All references in the accompanying financial statements to the number of
common shares and per-share amounts for 2000 and 1999 have been restated to
reflect the stock split.
The Company on June 30, 2000 issued 400,000 shares to the prior
shareholders of ISEmployment.com, Inc. (pre-merger company) and cancelled
800,000 shares of Magical Marketing, Inc. These shares were issued pursuant to
the Plan of Reorganization and Merger.
F-14
<PAGE>
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Financial Statements
As of April 30, 2000 and
The Period from March 7, 2000
(Date of Inception) to April 30, 2000
INDEPENDENT AUDITOR'S REPORT
Board of Directors
ISEmployment.com, Inc.
We have audited the accompanying balance sheet of ISEmployment.com, Inc. (A
Development Stage Company) as of April 30, 2000, and the related statements of
operations, stockholders' deficit, and cash flows for the period from March 7,
2000 (date of inception) to April 30, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of ISEmployment.com, Inc. as of
April 30, 2000, and the results of its operations and its cash flows for the
period from March 7, 2000 (date of inception) to April 30, 2000 in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2, the Company
has a cumulative loss of $152,909 and limited cash resources with which to carry
out management's plans. These conditions raise substantial doubt about its
ability to continue as a going concern. Management's plans regarding these
matters are also described in Note 2. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Levitz, Zacks & Ciceric
San Diego, California
June 20, 2000
F-15
<PAGE>
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Balance Sheet
April 30, 2000
ASSETS
Current Assets:
Cash $ 2,037
----------
Total current assets 2,037
Deposits 8,442
----------
Total assets $ 10,479
==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable $ 10,200
Advances payable 42,147
Loans payable 111,041
----------
Total current liabilities 163,388
----------
Stockholders' Deficit:
Common stock; $.0001 par value; 10,000,000 shares
authorized; 2,000,000 shares issued and outstanding 200
Receivable for common stock (200)
Deficit accumulated during the development stage (152,909)
----------
Total stockholders' deficit (152,909)
----------
Total liabilities and stockholders' deficit $ 10,479
==========
See accompanying notes to financial statements
F-16
<PAGE>
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Statement of Operations
Period from March 7, 2000
(Date of Inception) to April 30, 2000
System development costs $ 140,136
General and administrative costs 12,773
------------
Loss before income taxes 152,909
Income taxes -0-
------------
Net loss $ 152,909
============
Basic and diluted loss per share $ .08
============
Weighted average basic and
diluted shares outstanding 2,000,000
============
See accompanying notes to financial statements
F-17
<PAGE>
<TABLE>
<CAPTION>
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Statement of Stockholders' Deficit
Period from March 7, 2000
(Date of Inception) to April 30, 2000
Receivable
Common Stock for
----------------------- Common Retained
Date Shares Amount Stock Deficit Total
------------- ---------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Sale of stock for receivable March 7, 2000 2,000,000 $ 200 $ (200) $ -0- $ -0-
Net loss for the period
from March 7, 2000 to
April 30, 2000 (152,909) (152,909)
---------- ----------- ---------- ---------- ----------
Balance, April 30, 2000 2,000,000 $ 200 $ (200) $(152,909) $(152,909)
========== =========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements
F-18
<PAGE>
<TABLE>
<CAPTION>
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Statement of Cash Flows
Period from March 7, 2000
(Date of Inception) to April 30, 2000
<S> <C>
Cash flows from operating activities:
Net loss $(152,909)
Adjustments to reconcile net loss to net cash used in operating activities:
System development expenses incurred by assumption of
a related party loan 96,555
System development expenses incurred by assumption of
advances payable 42,147
Increase in deposits (8,442)
Increase in accounts payable 10,200
----------
Net cash used in operating activities (12,449)
----------
Cash flows from financing activities:
Proceeds from loans payable 111,041
Repayment of a related party loan (96,555)
----------
Net cash provided by financing activities 14,486
----------
Increase in cash 2,037
Cash at March 7, 2000 (date of inception) -0-
----------
Cash at April 30, 2000 $ 2,037
==========
</TABLE>
Supplemental disclosure of non-cash investing and financing activities:
The Company incurred system development expenses by assuming a loan payable to a
stockholder's parent in the amount of $96,555 and assuming advances payable in
the amount of $42,147. These funds were initially borrowed by the stockholder
and an entity related to the Company through common ownership. The funds were
expended by these parties in conjunction with the development of the concept,
programming, data base and web site that are intended to be used by the Company.
See accompanying notes to financial statements
F-20
<PAGE>
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Notes to Financial Statements
Period from March 7, 2000
(Date of Inception) to April 30, 2000
Note 1. THE COMPANY AND A SUMMARY OF ITS
SIGNIFICANT ACCOUNTING POLICIES
ISEmployment.com, Inc. (the Company), a Delaware corporation, has been in
the development stage since its formation on March 7, 2000. It is primarily
engaged in raising capital and developing an on-line human resources and
recruiting service for the information systems industry.
Prior to the Company's inception, individuals who became the Company's
stockholders (the Company's founders) and an entity they controlled incurred
costs in the development of the concept, data base, software and web site
intended for the Company's operations. Management anticipates that subsequent
to April 30, 2000, these parties will transfer the rights to the data base,
software, web site and other related intangible assets to the Company in
exchange for common stock. The Company will record the transfer at the
transferors' historical cost basis of the assets.
Revenue Recognition
Revenue from providing services to customers will be recognized when the
services are rendered.
Capitalization of Internal-Use Software Costs
During the preliminary project stage, the Company expenses internal and
external costs it incurs, or assumes from related parties, to develop
internal-use software. During the application development project stage the
Company capitalizes such costs and will amortize them on the straight-line
method over their expected useful lives.
Start-Up Costs
The Company expenses organization and start-up costs as incurred.
F-20
<PAGE>
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Notes to Financial Statements
Period from March 7, 2000
(Date of Inception) to April 30, 2000
Note 1. THE COMPANY AND A SUMMARY OF ITS
SIGNIFICANT ACCOUNTING POLICIES (continued)
Income Taxes
Deferred taxes are provided on a liability method whereby deferred tax
assets are recognized for deductible temporary differences and deferred tax
liabilities are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amount of assets and
liabilities and their tax bases. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that
some portion or all of the deferred tax assets will not be realized. Deferred
tax assets and liabilities are adjusted for the effects of changes in tax laws
and rates on the date of enactment.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from those estimates.
New Accounting Pronouncements
The Company does not expect the adoption of any issued, but not yet
effective, accounting pronouncements to have a material effect, if any, on its
financial position or results of operations.
F-21
<PAGE>
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Notes to Financial Statements
Period from March 7, 2000
(Date of Inception) to April 30, 2000
Note 2. GOING CONCERN UNCERTAINTY
As shown in the financial statements, the Company has a cumulative loss of
$152,909 and $2,037 of cash at April 30, 2000. The Company currently has no
sales. Accounts payable and future commitments exceed the Company's cash
balance. These factors, among others, raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans to address
these issues include transferring to the Company, in exchange for common stock,
the rights to the concept, data base, software, web site and other intangible
assets intended for the Company's operations. In order to continue as a going
concern, develop and commercialize its technology and, ultimately, achieve a
profitable level of operations, the Company will need, among other things,
additional capital resources and financing. Management's plans to obtain such
resources for the Company include (1) raising additional capital through sales
of common stock, the proceeds of which would be used to perfect the Company's
technology and services and satisfy immediate operating needs; and (2) using
common stock to pay for consulting and professional services. Management has
been in discussion with various financial resources in securing a firm
commitment on financing, but as of the date of the financials no firm
commitments have been entered into. In addition, management expects to seek
other potential joint venture partners or merger candidates that would provide
financial, technical and/or marketing resources to enable the Company to realize
the potential value of its technology. However, management cannot provide any
assurances that the Company will be successful in accomplishing any of its
plans.
The ability of the Company to continue as a going concern is dependent upon
its ability to successfully accomplish the plans described in the preceding
paragraph and eventually secure other sources of financing and attain profitable
operations. The accompanying financial statements do not include any
adjustments that might be necessary should the Company be unable to continue as
a going concern.
Subsequent to April 30, 2000, the Company has raised $73,725 of additional
financing (Note 10). The Company also has plans to become publicly trading
through a merger.
F-22
<PAGE>
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Notes to Financial Statements
Period from March 7, 2000
(Date of Inception) to April 30, 2000
Note 3. ADVANCES PAYABLE
The Company incurred system development expenses, consisting primarily of
salaries for the Company's founders, by assuming advances made to the Company's
founders and an entity related through common ownership. These advances were
made prior to the Company's formation. The advances are non-interest bearing and
due on demand.
Note 4. LOANS PAYABLE
The Company's loans payable of $111,041 at April 30, 2000, are due and
payable once the Company becomes publicly traded on the NASDAQ OTC market.
Payment of the balance is to be made by issuing shares of Company common stock
at a price of $.85 per share for a total of 130,635 shares. The loans are
non-interest bearing.
Note 5. RECEIVABLE FOR COMMON STOCK
On March 7, 2000, the Company issued 2,000,000 shares of common stock in
exchange for $200 in receivables. The receivables are non-interest bearing and
due on demand. The receivables are carried in the balance sheet as a reduction
to the corresponding common stock.
Note 6. INCOME TAXES
The Company's provision for income taxes consists of the following:
Currently payable $ -0-
Deferred taxes 52,000
Valuation allowance (52,000)
--------------
$ -0-
==============
F-23
<PAGE>
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Notes to Financial Statements
Period from March 7, 2000
(Date of Inception) to April 30, 2000
Note 6. INCOME TAXES (continued)
Income tax at the federal statutory rate is reconciled to the Company's
actual income tax provision as follows:
Federal income tax benefit at statutory rate 34 %
Valuation allowance (34) %
--------
0 %
========
The Company's total deferred tax assets at April 30, 2000, consist of
$52,000 associated with start-up costs capitalized for income tax purposes
offset by a $52,000 valuation allowance. The valuation allowance will be
evaluated each year considering evidence about whether the asset will be
realized.
Note 7. LOSS PER SHARE
Basic loss per share is calculated by dividing the net loss to the common
shareholders by the weighted average number of shares outstanding for the
period. Diluted loss per share reflects the potential dilution of securities
that could share in earnings of an entity such as convertible debt, stock
options and warrants. Diluted loss per share is the same as basic loss per
share as all contracts to issue shares were anti-dilutive.
Note 8. RELATED PARTY TRANSACTIONS
The Company incurred system development expenses, consisting primarily of
salaries for the Company's founders, by assuming a loan payable to a
stockholder's parent in the amount of $96,555. These funds were borrowed by the
stockholder and an entity related to the Company through common ownership. The
funds were expended prior to the Company's formation by these parties in
conjunction with the development of the concept, programming, data base and web
site that are intended to be used by the Company. The loan was repaid by the
Company prior to April 30, 2000. Since its formation, the Company has utilized
office facilities provided to it at no expense by the stockholders.
F-24
<PAGE>
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Notes to Financial Statements
Period from March 7, 2000
(Date of Inception) to April 30, 2000
Note 9. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of cash and accounts payable approximates fair value due
to their short term nature. The fair value of the loans payable and advances
payable are not determinable because quoted market prices are not available and
the cost of obtaining an independent valuation is excessive.
Note 10. SUBSEQUENT EVENTS
Lease Agreement
The Company entered into a five year lease for office facilities in
Windsor, Ontario effective June 1, 2000. The lease calls for rent of $66,000
(Canadian) per year or approximately $42,000 (U.S.) at current exchange rates.
Financing
Subsequent to April 30, 2000, the Company raised additional funds of
$73,725 through loans payable in common shares totaling 86,735.
Note 11. YEAR 2000 CONVERSION (UNAUDITED)
The Company recognizes the need to ensure its operations will not be
adversely impacted by the year 2000 software failures.
The Company's accounting software and certain other applications used in
its operations were purchased from outside vendors. Management believes that
these applications are Year 2000 compliant. As a result, management of the
Company does not believe that the Year 2000 issue will have an adverse impact on
its financial statements or on its operations.
F-25
<PAGE>
(b) Pro Forma financials are set forth below.
<TABLE>
<CAPTION>
ISEMPLOYMENT.COM, INC.
(Formerly known as Magical Marketing, Inc.)
Unaudited Pro-Forma Balance Sheet
April 30, 2000
Magical
Marketing ISEmployment.com Pro-Forma Adjustments
Historical Historical (Note 2) Combined
----------- ------------- --------- -----------
<S> <C> <C> <C> <C>
Current Assets:
$ $ 2,037 $ 2,037
----------- ------------ -----------
Total current assets 2,037 2,037
8,442 8,442
----------- ------------- -----------
Deposits
$ $ 10,479
Total assets $ 10,479
=========== ============= ===========
Current Liabilities:
Accounts payable $ $ 10,200 $ 10,200
Advance payable 42,147 42,147
111,041 111,041
Loans payable
----------- ------------ -----------
163,388 163,388
----------- ------------ -----------
Total current liabilities
Stockholders' Deficit:
Common Stock 1,000 200 $ (600) (600)
Paid-in capital 955 (1,355) (400)
Receivable for common stock (200) (200)
Deficit accumulated during
the development stage (1,955) (152,909) 1,955 (152,909)
----------- ------------ --------- -----------
Total stockholders' deficit (152,909) -0- (152,909)
----------- ------------ --------- -----------
Total liabilities and
stockholders' deficit $ $ 10,479 $ -0- $ 10,479
=========== ============= ========= ===========
</TABLE>
F-26
<PAGE>
<TABLE>
<CAPTION>
Magical ISEmployment.com Pro-Forma
Marketing Adjustments
Historical Historical (Note 2) Combined
---------- ---------------- -------- -----------
<S> <C> <C> <C> <C>
Systems development costs $ $ 140,136 $ 140,136
General and administrative costs 12,773 12,773
Loss before income taxes 152,909 152,909
Income taxes
Net loss $ $ 152,909 $ 152,909
========== ================ ===========
Basic and diluted loss per share $ $ .08 $ .25
========== ================ ===========
</TABLE>
F-27
<PAGE>
ISEMPLOYMENT.COM, INC.
(Formerly known as Magical Marketing, Inc.)
Notes to Unaudited Pro-Forma Balance Sheet
and Statement of Operations
Note 1. ACQUISITION AND GENERAL
On June 30, 2000, ISEmployment.com, Inc. (ISEmployment), a Delaware
corporation, and Magical Marketing, Inc. (Magical Marketing), a Wyoming
corporation, merged with Magical Marketing as the surviving corporation. Magical
Marketing issued 400,000 shares of its common stock for all 2,000,000
outstanding shares of ISEmployment. As part of the merger transaction, 800,000
shares of Magical Marketing common stock were purchased and retired and Magical
Marketing changed its name to ISEmployment.com, Inc.
Note 2. PRO-FORMA BALANCE SHEET AND STATEMENT OF OPERATIONS
ISEmployment was not incorporated until March 7, 2000 and did not begin its
development stage activities until April 28, 2000. Accordingly, pro-forma
information for the year ended December 31, 1999, and the quarter ended March
31, 2000 is the historical information presented by Magical Marketing: The
accompanying unaudited pro-forma balance sheet and statement of operations is
presented as of April 30, 2000 and for the four months then ended as if the
merger occurred on March 7, 2000, the date of formation of ISEmployment.
Since Magical Marketing has no assets and minimal activity, the merger is
accounted for as a reverse acquisition.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Wyoming law authorizes a Wyoming corporation to indemnify its officers and
directors against claims or liabilities arising out of such person's conduct as
officers or directors if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
Company. The Articles of Incorporation provide for indemnification of the
directors of the Company. In addition, the Bylaws of the Company provide for
indemnification of the directors, officers, employees or agents of the Company.
In general, these provision provide for indemnification in instances when such
persons acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the Company.
ITEM 25. OTHER EXPENSES OF ISSUANCES AND DISTRIBUTION
The Registrant estimates that expenses in connection with the Offering described
in this Registration Statement (other than the underwriting discount and
commissions and reasonable expense allowance) will be as follows:
F-28
<PAGE>
SEC registration fee . . . . . . . . . . . . . . . . . . . . $ 100
Printing and engraving expenses. . . . . . . . . . . . . . . $ 2,000*
Accounting fees and expenses . . . . . . . . . . . . . . . . $ 1,000*
Legal fees and expenses (other than Blue Sky). . . . . . . . $ 15,000*
Blue sky fees and expenses (including legal and filing fees) $ 1,000*
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . $ 1,000*
--------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,100*
========
*Estimated Amounts.
All expenses of the registration of the shares will be borne by the Company.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
The following securities were issued by the Company within the past three years
and were not registered under the Securities Act:
Maximum No. of
Shares Beneficially Shares to be Sold
Name of Owned Prior to Pursuant to this
Security Holder Offering Prospectus
---------------------------- ------------------- -----------------
Frank Anjakos
1971 N. Lindenwood Drive
Tucson, AZ 85712 2,000 2,000
Cindy Baker
P.O. Box 40484
Tucson, AZ 85717 2,000 2,000
Steve Bays
5637 E. Spring Street
Tucson, AZ 85712 2,000 2,000
Brain Delfs
5162 E. Citrus Street
Tucson, AZ 85712 2,000 2,000
James Delfs
3730 N. Tucson Blvd.
Tucson, AZ 85716 2,000 2,000
Sam Erbst
770 N. Dodge #33
Tucson, AZ 85749 2,000 2,000
<PAGE>
Maximum No. of
Shares Beneficially Shares to be Sold
Name of Owned Prior to Pursuant to this
Security Holder Offering Prospectus
---------------------------- ------------------- -----------------
Gus Fotinos
6547 N. Turnberry Drive
Tucson, AZ 85718 2,000 2,000
Allyson Fox
61 Kennedy Parkway
Toronto, Canada 2,000 2,000
Audra Guthery
4810 E. Seneca
Tucson, AZ 85712 2,000 2,000
David H. Hack
232 W. Smoot Drive
Tucson, AZ 85705 50,000 50,000
Matthew S. Hodges
1529 N. Desmond
Tucson, AZ 85712 2,000 2,000
Kim Lasater
5531 E. Spring Street
Tucson, AZ 85712 2,000 2,000
Jeff Milton
2519 E. Helen
Tucson, AZ 85716 2,000 2,000
Suzanne Morvay
4042 N. Pontatoc Road
Tucson, AZ 85718 2,000 2,000
Mike Neighbors
128 N. Southern Swale Avenue
Tucson, AZ 85748 2,000 2,000
Thomas Nieman
7825 E. Sabino Hallow Court
Tucson, AZ 85749 2,000 2,000
<PAGE>
Maximum No. of
Shares Beneficially Shares to be Sold
Name of Owned Prior to Pursuant to this
Security Holder Offering Prospectus
---------------------------- ------------------- -----------------
Ron Olson
9969 E. Paseo San Ardo
Tucson, AZ 85747 2,000 2,000
Mark Polifka
1132 Mohawk
Topanga, CA 90290 2,000 2,000
Sophie Radecki
207 Hallow Street
Toronto, Canada M6H1Y6
2,000 2,000
Jonathan Roberts
2102 N. Donner Avenue
Tucson, AZ 85749 50,000 50,000
Lowell E. Robinson
P. O. Box 23
Arivaca, AZ 85601 2,000 2,000
Monica Romero
2528 W. Criswell Court
Tucson, AZ 85745 2,000 2,000
Melissa Saucedo
7019 W. Avondale
Tucson, AZ 85743 2,000 2,000
Kevin Sherlock
360 N. Craycroft
Tucson, AZ 85710 50,000 50,000
Howard Smith
4050 N. Hiddencove Place
Tucson, AZ 85749 2,000 2,000
John Sylvester
10222 E. Sylvester Road
Hereford, AZ 85615 2,000 2,000
<PAGE>
Maximum No. of
Shares Beneficially Shares to be Sold
Name of Owned Prior to Pursuant to this
Security Holder Offering Prospectus
---------------------------- ------------------- -----------------
Raymond Willey
1192 Joseph Ct.
Ripton, CA 95366 2,000 2,000
Jennifer L. Worden
9055 E. Catlina Highway
No. 5206
Tucson, AZ 85749 2,000 2,000
Scott Murray
213-380 Pelissier Street
Windsor, Ontario N9A 6W8
Canada 200,000 200,000
Frank Ulakovich
213-380 Pelissier Street
Windsor, Ontario N9A 6W8
Canada 200,000 200,000
<PAGE>
<TABLE>
<CAPTION>
ITEM 27. EXHIBITS
<S> <C>
EXHIBIT INDEX
(a) The following exhibits are filed as part of this Registration Statement:
2.1 Plan of Merger between ISEmployment.com, Inc. and the shareholders of
Magical Marketing, Inc., dated June 30, 2000 (Incorporated by reference
from Registrant's Exhibit 2.1 to the Current Report on Form 8-K, filed
July 17, 1999)
3.1 Articles of Incorporation of ISEmployment.com, Inc. (Incorporated by
reference from Registrant's exhibits 3.1 and 3.2 to the Registration
of Securities on Form 10-SB, filed December 22, 1999)
3.2 By-Laws of ISEmployment.com, Inc. (Incorporated by reference from
Registrant's exhibit 3.3 to the Registration of Securities on Form 10-SB, filed
December 22, 1999)
4.1 Form of Common Stock Certificate
5.1 Opinion of Robert H. Domico, Esq.
23.1 Consent of Levitz, Zacks & Ciceric
23.2 Consent of Robison, Hill & Co.
23.3 Consent of Robert H. Domico, Esq. (included in Exhibit 5.1)
</TABLE>
ITEM 28. UNDERTAKINGS
(a) The undersigned Company hereby undertakes to:
(1) File, during any period in which it offers or sells securities, a
post effective amendment to this Registration Statement to:
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Securities Act");
(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the information in
the Registration Statement.
(iii) Include any additional or changed material information on
the plan of distribution.
(2) For determining liability under the Securities Act, each
post-effective amendment shall be treated as a new registration statement of the
securities offered, and the offering of the securities at that time shall be
deemed to be the initial bona fide offering.
<PAGE>
(3) File a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
(b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or a controlling person of the Company
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of competent
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in the city of Windsor,
Ontario, Canada, on November 10, 2000.
ISEMPLOYMENT.COM, INC.
By: /s/ Scott Murray
------------------
Scott Murray, President, and
signing in his capacity as
principal executive officer, principal
accounting officer and sole director
By: /s/ Frank Ulakovich
---------------------
Frank Ulakovich, Chief Executive
Officer and director
<PAGE>
TABLE OF CONTENTS
Page
----
Prospectus summary. . . . . . . . . . . . . . . . . . . . . 2
Risk factors. . . . . . . . . . . . . . . . . . . . . . . . 3
Use of proceeds . . . . . . . . . . . . . . . . . . . . . . 7
Market information. . . . . . . . . . . . . . . . . . . . . 7
Selling shareholders. . . . . . . . . . . . . . . . . . . . 8
Management's discussion and analysis of financial condition
and results of operations. . . . . . . . . . . . . . . 11
Business. . . . . . . . . . . . . . . . . . . . . . . . . . 11
Management. . . . . . . . . . . . . . . . . . . . . . . . . 16
Description of securities . . . . . . . . . . . . . . . . . 16
Indemnification of officers and directors . . . . . . . . . 18
Related transactions. . . . . . . . . . . . . . . . . . . . 18
Shares eligible for future sale . . . . . . . . . . . . . . 18
Plan distribution . . . . . . . . . . . . . . . . . . . . . 18
Legal matters . . . . . . . . . . . . . . . . . . . . . . . 19
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Additional information. . . . . . . . . . . . . . . . . . . F-1
Until 90 days after the effective date, all dealers that effect transactions in
these shares, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
NO DEALER, SALES REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFERING
DESCRIBED IN THIS PROSPECTUS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY ISEMPLOYMENT.COM, INC. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE PURSUANT TO THIS PROSPECTUS SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF ISEMPLOYMENT.COM, INC. SINCE THE DATE OF THIS PROSPECTUS OR THAT THE
INFORMATION CONTAINED IN IT IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
<S> <C>
2.1 Plan of Merger between ISEmployment.com, Inc. and the shareholders of Magical
Marketing, Inc., dated June 30, 2000 (Incorporated by reference from Registrant's
Exhibit 2.1 to the Current Report on Form 8-K, filed July 17, 1999)
3.1 Articles of Incorporation of ISEmployment.com, Inc. (Incorporated by reference from
Registrant's exhibits 3.1 and 3.2 to the Registration of Securities on Form 10-SB, filed
December 22, 1999)
3.2 By-Laws of ISEmployment.com, Inc. (Incorporated by reference from Registrant's
exhibit 3.3 to the Registration of Securities on Form 10-SB, filed December 22, 1999)
4.1 Form of Common Stock Certificate
5.1 Opinion of Robert H. Domico, Esq.
23.1 Consent of Levitz, Zacks & Ciceric
23.2 Consent of Robison, Hill & Co.
23.3 Consent of Robert H. Domico, Esq. (included in Exhibit 5.1)
</TABLE>
<PAGE>
